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The Forum on Anti Terrorism and Its FinancingThe Forum on Anti Terrorism and Its Financing1818––19 December 200819 December 2008
DakarDakar-- SenegalSenegal
Presented by :Presented by :
Panji Achmad, SH, LL.MPanji Achmad, SH, LL.MGroup Head of AnalystsGroup Head of Analysts
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PRESENTATION OUTLINE
• Introduction
• Why focus on financing of terrorism ?
• Legal basis of CFT: Indonesian Perspectives
• Indonesia’s AML & CFT schema
• The role of FIU (PPATK) in CFT and the obstacles
• The role of Banks in CFT and the obstacles
• Financing of terrorism typologies
• Strategy for combating financing of terrorism
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Population: 240Population: 240 miomio87%87% moslemsmoslems (200(200 miomio))
17.500 islands17.500 islands++ 22 miomio km2km2
2.770 x Singapore2.770 x Singapore
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BALI BOMBING I (2002)Victims: 202 killed (164 foreigners), 209 injured
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JW MARRIOT BOMBING (2003)Victims: 12 killed, 150 injured
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AUSTRALIAN EMBASSY BOMBING (2004)Victims: 11 killed, 140 injured
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BALI BOMBING II (2005)Victims: 23 killed, 129 injured
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BALI BOMBING II (2005)
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3 Bombers of Bali Bombing I
Final verdict: Death penalty executed by Firing Squad 09
Nov 08
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How to approach and fight againstTerrorism Financing?
An Indonesian approach…..
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New Approach
Follow the money ? Follow the suspect ?
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Follow the money approach
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WHY FOLLOW THE MONEY TRAIL ?
Benefits:• To identify the finances and financiers of crime and
terrorism
• Following the money can lead to the most senior orpowerful people in the terrorist organization
• To proactively detect terrorist and their actions andactivities
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WHAT FINANCIAL INFORMATION MAY TELL YOU
• Location of persons at certain times• Relationship between related parties• Involvement of related people• Who controls the funds• Identification documents, phone number, addresses• The assets held• Travel undertaken by related person
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INDONESIAN FIU (INTRAC/PPATK)
is an independent agency in implementing itsduties and authority for preventing anderadicating the criminal offences of moneylaundering and CFT, responsible directly to thePresident of the Republic of Indonesia.
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Request and receive report fromFinancial Service Provider (PJK)
Request for information concerning thedevelopment of investigation /legalsuit
Auditing the PJK
THE AUTHORITY of PPATKTHE AUTHORITY of PPATK
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II.1. Obligation to report to INTRAC
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Who have to report?
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Reporting Parties & Customs
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How to report to INTRAC ?
1. Manual reports
2. On line reports
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$
FSP
STR&CTR
STR&CTR
CUSTOMS
CBCC
CBCC
manual
manual & on-line
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II.2. Type of Reports to PPATK
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II.2. Type of Reports to PPATK
Suspicious Transaction Reports(STRs)
Cash Transaction Reports (CTRs)
Cross Border Cash CarryingReports (CBRs)
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(STRs)
a.deviating from the profile, characteristics or theusual transaction patterns of the customerconcerned;
b.by customers that can be reasonably suspected tobe conducted for the purpose of avoidingreporting of the transactions; or
c.whether or not completed using assets that arereasonably suspected to constitute the proceedsof crime.
Suspicious Financial Transactions shall be financialtransactions:
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CASH TRANSACTION REPORTs (CTRs)
Cash Financial Transactions shall be withdrawals,deposits or entrustments on a cash basis or usingother monetary instruments, utilizing Providers ofFinancial Services, to a cumulative total ofRp.500,000,000.00 (five hundred million rupiah) ormore or an equivalent amount in anotherCurrency (approx.USD55,000), made either in onetransaction or in several transactions within 1 (one)business day.
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CROSS BORDER CASH CARRYING REPORTs (CBCCRs)
• Any person taking cash into or out of the territory ofthe Republic of Indonesia in the amount of Rp 100million or more, or the equivalent in anothercurrency (approx.USD10,000), must report to theDirectorate General of Customs and Excise.
• The Directorate General of Customs and Excise mustreport the information received within 5 (five) daysto the PPATK/INTRAC.
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Data contained on Reports received
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THE ROLE OF BANKS IN CFT
To implement the KYC Principles
To do building capacity (training)
To oblige to report STRs and CTRs to the PPATK
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THE OBSTACLES FACED BY BANKS
The difficulties in detecting any financial transactionrelated to FT
- Small amount of money
- The transactions are in line with the customerprofile
With regard to FT, most of banks reports is based on theFIU (PPATK)/ the Police inquiry
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ANALYSIS PROCESS CONDUCTED BY PPATK
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A Process to Analyse STRs
FIU
FSP
DATABASE
VISUAL LINK
TRACES
INQUIRY FSP
Regulator
ANALYSES
FIU- LNYES NO
AGO/POLICE
KPK
PPNS
COURT
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ANALISYS TOOLS
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Current Approach
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THE PPATK’S ANALYSIS REPORT RELATED TO TERRORISMAs of 31 October 2008
612TOTAL:
25Can not be identified
5Smuggling
5Illegal Logging
1Theft
4Currency Counterfeiting
1Child Pornography
11Narcotics
15Bribery
5Gambling
7Tax Evasion
6 (1%)Terrorism
21False Document
29Banking Fraud
10Fraud Attempting
201Fraud
266Corruption
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THE PPATK’S ANALYSIS REPORT RELATED TO TERRORISM
43%
33%
2%
5%
1%4%
1%1%
2%
0%
0%
2%1%
1%1%
3%
Corruption
Fraud
Fraud Attempting
Banking Fraud
False Document
Terrorism
Tax Evasion
Gambling
Bribery
Narcotics
Child Pornography
Currency Counterfeiting
Theft
Illegal Logging
Smuggling
Can not be identif ied
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Port *) 7
Total Report 2764
Batam 1490
Jakarta 1127
Bandung 1
Tanjung Balai Karimun 95
Denpasar 43
Dumai 1
Medan 7
*) Batam, Cengkareng Airport, Bandung PostOffice, Tanjung Balai Karimun Harbor,Denpasar Airport, Dumai & Medan
CROSS BORDER CASH CARRYING (CBCC) REPORTsAs of 30 Oktober 2008
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How to trace?How to trace?
-- Depends on method of payments to be used;Depends on method of payments to be used;-- Need work together and coordination with PSONeed work together and coordination with PSO
Tracing Financial Transaction
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INDONESIAN PAYMENT SYSTEM
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Methods of Payments
Depend on payment system used by reported party:• Cash paper money & coins…(-)• Non Cash (IDR)
• Through ACH• Through Funds Transfer System/RTGS• Others
• Paper based (TC,)• Card Based (KK, ATM, Debit Card, SVC)
• Transfer through other channel outside banking system(money remittances)
Payment system operators (PSO) and members mayPayment system operators (PSO) and members mayreport and provide information to INTRACreport and provide information to INTRAC
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Operators & Instruments
Conducting cross check to reporting parties and others:Operators of Payment System in Indonesia- Funds Transfer
• Operated by CB• Operated by Bank Internal (intra bank)/ External (inter bank)• Operated by Non Bank Money Remittance Non Bank
• Payment Instruments• Paper based
• Issued by bank TC,• Issued by non Bank TC
• Card based• Issued by bank (ATM, CC, DC, SVC, EM)• Issued by non bank (CC, SVC, EM)• E-Money/ SVC/Prepaid Card Bank & Non Bank
• Money Remittances• Operated by Bank• Operated by non bank (WU, MG)
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CLEARING SYSTEMCLEARING SYSTEM
Bank B Data
Bank C, Data
Bank D Data
Operator
Bank A Data
• Exchange of payment instruments issued bycommercial banks
• Settlement will be conducted by central bank bydebiting or crediting bank’s account at theoperator of clearing Data
Cek/BGBank A
Transfer toBank C
Transfer toBank C
Cek/BGBank D Transfer ke
Bank B
Transfer toBank C
Cek/BGBank A
Transfer toBank B
Transfer toBank D
Cek/BGBank C
Transfer toBank A
Transfer toBank B
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EFT OPERATOR
Receiving B DataST
Sending BankData ST
Central System of RTGSRCC (Operator)
Data ….
Bank sends a fundtransfer instrumentfor benefit of areceiving bankthrough RT data…
Receivingconfirmationfrom RCCdata…
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MoneyGramTransaction Centre– Denver (Data ST)
SendAgent
ReceiveAgent
Sender Receiver
MoneyGramSystem
MoneyGramSystem
Sender advises Receiver of MoneyGram referencenumber
Transfer through Remittances
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E-Money Scheme
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New Approach to be more successful
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FUNDING of TERRORIST GROUPS
Sources of funding :Sources of funding :
Proceed of illegal activity : Kidnap for ransom, robbery,counterfeit goods, narcotics trafficking or front companies
Barter/trading, eg. food for arms
Proceeds derived from legitimate business activity set upby terrorist group
Donations from charities/NPO/NGO’s
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STRs RELATED TO CFT
PPATK has received > 39 STRs from FinancialService Providers related to terrorism (as of 30September 2008)
6 of result STRs related to terrorism financinghas been transferred to Police HQ
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Future Threats
Various transactions:• through non banking system (hawalah)• through internet basis;• by using paperless instruments;• by using negotiable instruments:• by using e-money.
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THE OBSTACLES FACED BY PPATK
- The using of cash transactions difficult to tracethe flow of money;
- Fake ID .
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Conclusion
The FIU has played an important role in the context ofCombating Financing of Terrorism.
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THANK YOU
Merci Beaucoup
TERIMA KASIH